RESOLVE holiday bills and start building wealth

I RESOLVE… to clear these holiday bills and start building wealth.

 

Most Canadians suffer with their highest personal debt load in January, when the “holiday hit” arrives and your credit card statements let you know just how much you spent on the festive season. It’s especially hard if you already had a burgeoning debt load before the holidays.

This year, make the best New Year’s resolution ever: resolve to clear that debt, and start building wealth. With the right plan in place, this year could be the beginning of a strong new financial life. Start now, and every month you could be seeing the difference: a boost to your monthly cash flow, one easy payment, faster debt paydown, and potentially thousands of dollars in interest savings.

If you have enough equity in your home (you can’t refinance a mortgage above an 80 per cent loan to value), we can show you how to use that equity to consolidate your high-interest debt into a new or existing mortgage. In almost every case, you’re better off rolling large amounts of high-interest debt into a mortgage. Why? Because we are benefiting from mortgage rates that continue to be among the lowest in decades.  Just compare mortgage rates with what you’re paying on your credit cards and other debts. 

First we’ll do an assessment of your situation.  Here’s an example – mortgage, car loan and credit cards total $225,000. Roll that debt into a new $233,000 mortgage, including a fee to break the existing mortgage, and look at the payoff:

 

                                                                        Current                            NEW

                                            Today        Monthly Payments*     Monthly Payment*

Mortgage                           $175,000                $969                                $1,163

Car loan                            $  25,000                $495                                $       0

All credit cards                  $  25,000                $655                                $       0

Total                                                             $2,119                                 $1,163

 

That’s $956 less each month! Now decide how to use that $956. If you put $500 into your mortgage payment, you’ll reduce your amortization from 25 years to 15. Or you could invest in RRSPs or RESPs and reap some tax benefits.

It’s a new year. Make it the start of a new financial life. We’d love to help you crunch some numbers to see what kind of life you could be living, something to really celebrate about next New Year’s Eve!

 

 

*4.5% current mortgage, 3.5% new mortgage, 25 year am. Credit cards 19.5% and car loan 7%, both at 5 year am. OAC. Subject to change. For illustration purposes only.

 

 

 

Michelle Natareno

Mortgage Agent

michelle@4dfinancial.com

519-675-8798

 

First Time Homebuyers can tap into their RRSPs. Let me show you how!

First-time homebuyers can tap their RRSPs to help with a home purchase

 

Thinking about buying your first home? Wish you had saved up a good down payment? Maybe you have, but
didn’t know it. Designed to help first-time buyers get into home ownership, the federal Home Buyers’ Program lets you access tax-free monies for use towards the purchase or even construction of your first home.

Why tap into your RRSP? The most common reason is to boost the down payment on a home. The bigger your down payment, after all, the smaller your mortgage. And you may qualify for better interest rates too; your healthy down payment shows the lender that you are a low-risk candidate for a mortgage loan.

Here’s how it works. If you’ve been contributing to an RRSP, then you already know that the program is designed to set aside money for retirement, with the money going into the program tax-free (paying taxes on the funds when they’re withdrawn later). But there are some valid reasons why you may want to access these funds earlier. A home purchase may be one of them. As a first-time homebuyer, you are allowed to withdraw money tax-free, provided you adhere to the repayment plan. (Just make sure, of course, that your RRSP is not a locked-in plan.) You can withdraw up to $25,000 from your plan. If your spouse qualifies as a first-time homebuyer, then he or she will also be able to withdraw $25,000. Between the two of you, you could possibly have a hefty down payment sum of $50,000. That’s enough to make a substantial difference in the affordability of home ownership!

There are some conditions that you should know about. For example, you must enter into a written agreement to buy or build before you can withdraw money. And you are expected to complete the home purchase no later than October 1 of the year following your withdrawal. In addition, all HBP-eligible withdrawals must be made in the same calendar year, and you can’t have owned the home more than 30 days before the date of withdrawal. Above all, you must meet certain repayment terms. Repayment to your RSP begins the second year following the year of withdrawal. You have up to fifteen years to repay, and each annual repayment must be at least one-fifteenth of the total withdrawal, otherwise you have to include each repayment amount as income for that year.

A common question: so who exactly qualifies as a first-time homebuyer? What if one partner has owned a home before, for example? Well, it often happens that only one partner qualifies as a first-time homebuyer, so only one RRSP can be tapped for funds. But if either of you has not owned a home for the past five years, then you meet the description of a first- time homebuyer!

Any kind of home qualifies for the program – detached, semi-detached, mobile, condominium, etc. – as long as it is located within Canada and will be your principal residence within one year. A detailed booklet is available on the Canada Revenue Agency website. Look for T1036, which is the form required for requesting a withdrawal.

If you’re thinking of using your RRSP for your first home purchase, consider meshing your RRSP strategy with your down payment savings. Putting away funds in your RRSP not only saves you the current income tax, but any tax refund translates into more dollars towards your down payment. If you have RRSP contribution room, you can make your contribution now and then after 90 days you can redeem your RRSP under this plan, using your tax refund to bolster your down payment.

Let’s have a conversation about your future plans for home ownership. A good plan is always a great beginning!

 

 

 

Michelle Natareno

Mortgage Agent

michelle@4dfinancial.com

519-675-8798

 

http://mortgageintelligence.ca/brokers/Michelle-Natareno

 

Pull yur debt together an save for retirement! Smart planning!

Use your mortgage to pull debt together and save for retirement

Perhaps too much debt has made your monthly cash flow tight, putting you under some financial pressure and making it almost impossible to save for retirement.  With the right plan in place, it may be possible to simplify your debt, reduce interest costs, and save for retirement, all without earning more or cutting your spending. 

If you have enough equity in your home (you can’t refinance a mortgage above an 80 per cent loan to value), we can show you how to use that equity to roll your high-interest debt into a low-rate mortgage and make a large RRSP contribution if you have contribution room. 

Here’s an example – mortgage, car loan and credit cards total $225,000. If you have enough equity, you can roll that debt into a new $233,000 mortgage, including a fee to break the existing mortgage, and look at the payoff.

                                                                                 Current                                        NEW

                                                       Today        Monthly Payments*     Monthly Payment*

Mortgage                          $175,000                $969                                $1,144

Car loan                            $  25,000                $495                                $       0

All credit cards                $  25,000                $655                                $       0

Total                                                              $2,119                              $1,144

Add $25,000 RRSP Contribution ($258,000 mortgage)                    $1,266

*4.5% current mortgage, 3.34% new mortgage, 25 year am. Credit cards 19.5% and car loan 7%, both at 5 year am. OAC. Subject to change. For illustration purposes only.

By pulling debt together into a low-rate mortgage, your monthly debt payment is $975 less each month- a great improvement in cash flow! If $500 of that extra cash flow is put back into your mortgage, your mortgage amortization is reduced from 25 years to 15.

If a $25,000 RRSP contribution is also made (assuming you have contribution room), the monthly payment is still reduced by a large amount - $933 per month. Assuming a 40% marginal tax bracket, there may be a tax refund of $10,000 from the RRSP contribution. If that refund and $500 of the extra cash flow each month is put into the mortgage, the $25,000 RRSP amount added to the mortgage is paid off in approximately 2.3 years. 

For some homeowners, this is a great way to save more and pay less! Not only can you make your monthly debt payment smaller and save on interest, you also save for retirement—all in one!  Manage your debt, save more for retirement, and enjoy a new financial life. I’d love to help you crunch some numbers and assess your situation. 

Michelle Natareno
Mortgage Agent
michelle@4dfinancial.com
519-675-8798

Buying a fixer upper? Protect yourself from "sink or swim" renovations!

Buying a fixer upper? Protect yourself from “sink or swim” renovations!

So you’re one of those buyers who absolutely loves older homes: the character, the unique architecture, the settled neighbourhood… and maybe the great value. But even older homes with “great bones” sometimes need a little renovation to turn them into the home of your dreams. Unfortunately, sometimes on top of the home purchase price, a few costly renovations can sink you.

Good news. We’ve got a mortgage to keep you happily afloat.

We can bundle the cost of those immediate renovations right into the mortgage: so instead of sky-high credit card and line of credit bills… you’ve got your mortgage and renovations looked after in one easy monthly payment.

It’s called a “purchase plus improvements” mortgage. It covers the sale price of the home, plus any renovations that would increase the value of the property, up to $40,000. You also get pre-payment privileges – so you can pay off your renovation faster.

We can take you through the process, so your mortgage and renovations go… swimmingly.

 

 

Michelle Natareno

Mortgage Agent

519-675-8798

michelle@4dfinancial.com

 

 

Preventing Identity Theft

Preventing Identity Theft

 

Identity theft can cause you huge headaches, but having your house sold without your knowledge is among the worst kind of outcome that can result. Take steps to prevent identity theft and fraud by :

 

• Checking your credit reports (www.equifax.ca, www.transunion.ca), credit card and bank statements regularly for inconsistencies, unknown charges and unauthorized credit inquiries.
• Not giving out personal information unless you know who you are dealing with, how it will be used, and if it will be shared.
• Protecting your mail and being aware if bills don’t arrive on time.
• Shredding all documents with personal or financial information.
• Safeguarding your PIN and decline the “remember me” on-line option for financial cards.

 

And speak to us about how title insurance could help protect your home from real estate title fraud!

 

 

 

Michelle Natareno

Mortgage Agent

michelle@4dfinancial.com

519-675-8798

http://mortgageintelligence.ca/brokers/Michelle-Natareno

Sleepwalking through a mortgage renewal

Almost half of homeowners sleepwalk through their mortgage renewal

Given the large financial commitment of a mortgage, it’s surprising that 44 per cent of Canadian homeowners either just accept whatever their lender offers at renewal, or don’t even remember how they renewed!

It’s tempting to just sleepwalk through the mortgage renewal process. But if you’re not doing even the slightest comparison shopping or negotiating, then you’re missing out on an opportunity to save thousands on your mortgage. When your lender sends you a letter saying it’s time to renew… what that really means is that it’s time to get advice. Professional, independent advice.

Get an expert second opinion on what you’re being offered. We’ll take a look, and compare it to what we can find out there as an alternative among the 50 or more lenders we have access to.

Got a mortgage renewal coming up in the next six months? Let’s start talking!

* A recent CAAMP/Maritz survey found that only 56% of renewers negotiated, 44% took the mortgage rate originally offered by their lender (39%) or just didn’t know how they renewed (5%)

 

Michelle Natareno

Mortgage Agent

michelle@4dfinancial.com

519-675-8798

http://mortgageintelligence.ca/brokers/Michelle-Natareno

Do you need a Personalized paydown plan for your holiday bills??

 

 

Do you need a Personalized Paydown Plan for your holiday bills?

Most Canadians suffer with their highest personal debt load in January, when the “holiday hit” arrives and your credit card statements let you know just how much you spent on the festive season. It’s especially hard if you already had a burgeoning debt load before the holidays.  That’s why it’s the perfect time to talk about a Personalized Paydown Plan.

With the right plan in place, this year could be the beginning of a strong new financial life. Start now, and every month you could be seeing the difference: a boost to your monthly cash flow, one easy payment, faster debt paydown, and potentially thousands of dollars in interest savings.

If you have enough equity in your home (you can’t refinance a mortgage above an 80 per cent loan to value), we can show you how to use that equity to roll your high-interest debt into a low-rate mortgage. First we’ll do an assessment of your situation.  Here’s an example – mortgage, car loan and credit cards total $225,000. Roll that debt into a new $233,000 mortgage, including a fee to break the existing mortgage, and look at the payoff:

 

                                                                                 Current                            NEW

                                                       Today        Monthly Payments*     Monthly Payment*

Mortgage                           $175,000                $969                                $1,163

Car loan                            $  25,000                $495                                $       0

All credit cards                  $  25,000                $655                                $       0

Total                                                              $2,119                                $1,163

*4.5% current mortgage, 3.5% new mortgage, 25 year am. Credit cards 19.5% and car loan 7%, both at 5 year am. OAC. Subject to change. For illustration purposes only.

That’s $956 less each month! Now decide how to use that $956. If you put $500 into your mortgage payment, you’ll reduce your amortization from 25 years to 15. Or you could invest in RRSPs or RESPs and reap some tax benefits. Consider putting some funds aside each month into a “December” fund – so you never have the financial pain of the “holiday hit” again!

It’s a new year. Make it the start of a new financial life. We’d love to help you crunch some numbers to see what kind of life you could be living, something to really celebrate about next New Year’s Eve!

 

Michelle Natareno
Mortgage Agent
michelle@4dfinancial.com
519-675-8798

http://mortgageintelligence.ca/brokers/Michelle-Natareno

The Mortgage Broker Advantage

The Mortgage Broker Advantage

 

Increasingly, Canadians are turning to mortgage brokers for their first and next mortgage, taking advantage of the value and convenience of their services.  A 2011 study conducted by CMHC (Canada Mortgage & Housing Corp) found that 48 per cent of first-time buyers completed their transaction with a mortgage broker, up from 45 per cent in 2009 and 35 per cent in 2007.

 

One of their most compelling reasons to work with a mortgage broker is that they have access to a wide range of lending sources, making it significantly easier to match borrowers with the mortgage product that best suits them. When you’re dealing directly with one financial institution, you just don’t know if you’re getting the best deal because they’ve only got their own menu of products to offer you.

 

If you are dealing with one of the largest mortgage brokers in the country, you’ll also enjoy considerable bargaining power. A large brokerage has clout with lenders to negotiate volume discounts that lead to lower rates and greater product choice than other companies. And, brokers are generally paid by the lender rather than the borrower, making it a logical choice to always consult with a mortgage broker.  They’re shopping the market for the best rates, doing all the work, and there’s no cost to you.

 

But a mortgage broker’s role extends beyond securing financing – to arranging the home appraisal and lawyer or notary, reviewing the purchase contract and statement of adjustments, securing mortgage life insurance, and keeping tabs on the entire closing process. And that’s just during the mortgage transaction. The broker then stays in touch, keeping clients apprised of new mortgage offers and rate fluctuations, and advising when to lock in a variable-rate mortgage.

 

Ultimately, the role of your mortgage broker is that of a trusted advisor and it’s a relationship that can last a lifetime. Many mortgage brokerage clients have been referred by word of mouth, and many are even second- and third generation client families.

 

Whether you’re taking on your first mortgage or a long-time homeowner looking to refinance, consolidate debt or leverage your equity to acquire a new property, a mortgage broker is a wealth of information. They can advise about down payment requirements, mitigating credit history issues, mortgage payment and prepayment options, interest-saving strategies, purchasing vacation, investment and commercial properties, qualifying with supplemental rental income, and mortgage options for new immigrants.

 

When you get a mortgage, likely the biggest financial commitment you’ll make in a lifetime, it’s critical that the person you’re dealing with is knowledgeable, able to answer your questions, and has access to a full range of lenders so you get the best mortgage for your needs.

 

 

 

 

Michelle Natareno

Mortgage Agent

michelle@4dfinancial.com

519-675-8798

http://mortgageintelligence.ca/brokers/Michelle-Natareno

 

Preventing Identity Theft

Preventing Identity Theft

 

Identity theft can cause you huge headaches, but having your house sold without your knowledge is among the worst kind of outcome that can result. Take steps to prevent identity theft and fraud by :

 

• Checking your credit reports (www.equifax.ca, www.transunion.ca), credit card and bank statements regularly for inconsistencies, unknown charges and unauthorized credit inquiries.
• Not giving out personal information unless you know who you are dealing with, how it will be used, and if it will be shared.
• Protecting your mail and being aware if bills don’t arrive on time.
• Shredding all documents with personal or financial information.
• Safeguarding your PIN and decline the “remember me” on-line option for financial cards.

 

And speak to us about how title insurance could help protect your home from real estate title fraud!

 

 

 

Michelle Natareno

Mortgage Agent

michelle@4dfinancial.com

519-675-8798

http://mortgageintelligence.ca/brokers/Michelle-Natareno

 

Understand your closings costs and ongoing expenses

Home Buying Preparedness

 

Understand your closing costs and ongoing expenses

 

According to a TD Canada Trust First-Time Home Buyers Report, one of the biggest lessons learned by 60 per cent of new home buyers was that they should have been more thorough when budgeting and accounting for all of the costs of home ownership.

 

Generally you need to set aside 2 to 4 per cent of your home’s selling price in total closing costs, which can include:

 

·         Appraisal fee

·         Home inspection

·         Tax: depending where you are, it’s called a Land Transfer Tax, Land or Deed Registration Fee, Tariff or Property Purchase Tax. This tax can take buyers by surprise because the amount can be substantial. Ask your mortgage broker for an estimate of what this can add up to in your situation.

·         Legal fees

·         Title insurance

·         Utility hook ups

·         Reimbursement of bills pre-paid by the previous owner, for instance property tax or utility bills

·         Interest adjustment

·         Moving costs

·         Furniture/appliances

 

When setting your budget, you also need to consider the ongoing costs that will become a part of your monthly home ownership expenses, which include:

 

·         Home insurance

·         Property taxes

·         Utilities – gas/hydro/water

·         Cable/Internet

·         Ongoing maintenance

 

 

TALK TO US EARLY. WE’LL MAKE SURE YOU ARE CLEAR ON ALL OF THE COSTS AND ONGOING EXPENSES ASSOCIATED WITH A NEW HOME. GET OFF ON THE RIGHT FOOT IN YOUR HOME BUYING JOURNEY!

 

Michelle Natareno

Mortgage Agent

michelle@4dfinancial.com

519-675-8798

http://mortgageintelligence.ca/brokers/Michelle-Natareno

 

Debt consolidation can offer big relief

Debt consolidation can offer big relief

 

If your debt is piling up – credit cards, store cards, car and loan payments– then the interest that you’re paying could be standing in the way of your financial security. If interest rates go up as expected, it could get a lot worse.

 

The good news is that Canadian homeowners have a great option: debt consolidation. It’s a simple concept: you roll up all the extra debt you have outside your mortgage, and you consolidate it into a new or existing mortgage. If you’ve built up some equity in your home, then this consolidation is the simplest way to power through your debt.

 

The key advantage is the low interest rate: you’re trading your higher-interest loans for one easy low interest payment. So you can see huge savings in interest charges and be out of debt faster than you thought possible. The second big advantage is cash flow. If you’re struggling with your monthly debt load, then a consolidation can offer big relief.

 

Dig out your credit card and loan statements. Write down the balances for each, note the interest rates you’re paying, and jot down the monthly payment amount. Now make an appointment with us and get a realistic appraisal of your options and savings.

Michelle Natareno
Mortgage Agent
michelle@4dfinancial.com
519-675-8798
http://mortgageintelligence.ca/brokers/Michelle-Natareno

Thinking of buying your next home?

Thinking of buying your next home?

Your first move should be to talk to us!

Maybe you want to create the perfect house that fits your lifestyle. Or maybe your family needs more room to grow. Whatever your reason, when you are ready to sell your home and buy a new one, we’ll help you review your mortgage options. If you will need a bigger mortgage, your options will include bringing your mortgage with you if it is portable. You can often “blend” your current mortgage rate with the mortgage rate on the additional funds you need. Or, you might want to consider breaking your current mortgage and getting a new one for the total amount. To break your mortgage, your lender typically has the right to charge a penalty, which we can review with you. Of course, the exact terms and conditions of your current mortgage need to be examined closely to determine what factors need to be considered. That’s why it’s worth a professional mortgage analysis. There’s no cost or obligation.

 

We’re up-to-date on current rates and all of the new opportunities available – from a wide range of lenders  – so we can help you with all of the mortgage details for your next home.

 

 

 

 

Michelle Natareno

Mortgage Agent

michelle@4dfinancial.com

519-675-8798

 

http://mortgageintelligence.ca/brokers/Michelle-Natareno